Offshore Oil and Gas Flashcards
How does DOI discharge its duty under OSCLA? (5)
??? what’s the actual result of center for biological diversity case? how does the coastal zone matter for this?
- Must consider national energy needs for 5-yr period + envr protection; @Phase 2, DOI only needs to consider the “potential for environemtnal damage “on a localized area basis”
- Only OCSLA sec. 18(a)(2) specifies “localized area” as the OCS (not coastal zone)
- As a matter of statutory interpretation, Congress made the decision that some drilling will occur and instructs DOI (“shall”) to prepare the 5-yr lease program
- DOI cannot consider the global env impacts of OG consumption at the lease stage to stop the lease (Center for BIological Diversity)
- However, Presidents have placed moratia on offshore leases bc nothing in the text prohibits it
How did major oil spills affect the status of offshore drilling?
- Congress enacted OSCLA & CZMA after Valdez and DeepWater
- Though nobody died and coastlines were not ruined, the BP paid $100B
- Fedgov only got 10%. The rest went to a federally-managed reclamation fund + states got proportional distributions
- States are supportive of fracking because they get dividends and remedies if spill happens
What is the market failure that offshore drilling regulation tries to correct?
- Negative externalities from environmental damage
- Auction process is more competitive than in coal, so gov’t likely has more fair market value
What is the statutory framework that governs offshore drilling?
- OSCLA
- CZMA
- Oil Pollution Act (OPA) - created after Valdez???
- NEPA
- ESA
How does CZMA work? (5)
- 2-step cooperative federalism; states additional oversight authority for activities, not limited to leases (SOI v. CA)
* Suspension of primary lease term requires consistency review - If a state completes a Coastal Zone Management Plan, it will get $ and the right to review federal actions for consistency review
- Sec. 307(b)(1)(A) - Each fed agency activity that affects coastal zone “shall be” consistent
- Sec. 307(b)(1)(B) - P has veto power upon request from Secretary
- Sec. 307(b)(2) - Any fed agency undertaking development in coastal zone “shall insure” consistency w/ state program
How doe OCSLA work?
what??? what does florida’s drilling have to do w/ OSC if only fed juris
- Defines outer continental as submerged waters beyond state jurisdiction
- Creates federal juris over OCS
- BOEM oversees leasing & developing O&G in OCS
* But FL has not engaged in offshore drilling
Explain the offshore drilling lease process
OSCLA 4-step process
1. Preparation - 5-yr schedule of proposed leases - no right to explore or develop areas
2. Lease sale - DOI solicits & issues bids
3. Exploration - allowed only if “not unduly harmful to marine life, or unreasonably interfere w/ other uses of the area)
4. Development/production - DOI and affected state & local govt review detailed plan, which may terminate if it would “cause serious harm or damage to marine, coastal, or human environments”
- States do not get consistency review until phase 4
Where does offshore drilling occur?
what???
Within Exclusive Economic Zones (EEZ)
* Not the same as sovereignty
* beyond 3-nautical miles of state juris from coastline (TX & FL have 9 nm state jurisdiction)
* You have the unique right to carry out economic actiities but do not have the right to stop non-warfaring vessles
How does OPA work?
- Created a trust fund financed by a tax on oil to streamline O&G spill cleanup
- Fund dispersed when responsible party is unable or unwilling to do so
how are states involved in the regulation of offshore drilling?
- OSCLA - federal law preempts to regulate offshore O&G development, but states have consistency review at phase 4
- CZMA allows significant role for state invovlement Sec. 307(1)(A) consistency review for activities that “affect” coastal zone. But, states do not have veto power, so CZMA is a paper tiger (CA v. Norton)
What does offshore generation depend on?
- Tourism (FL)
- Politics (Biden)
What is a primary term?
- describes the exploration stage that continues until the well produces “paying quantities”
- As long as the well produces O&G, need not be decommissioned
Decommissioning offshore facilties
- NVP issue
- Expensive to do, difficult to monitor & enforce
- Companies “produce” in case market conditions change to make profits & avoid decommissioning costs
